Question 1

Trademarks would appear in which balance sheet section?

Accepted Answer

A)  Intangible assets 
B)  Investments 
C)  Property, plant, and equipment 
D)  Current assets 
A)  Intangible assets 
B)  Investments 
C)  Property, plant, and equipment 
D)  Current assets

Question 2

For 2014 Kuhlman Corporation reported net income of $28,000; net sales $400,000; and average share outstanding 16,000. There were no preferred dividends. What was the 2014 earnings per share?

Accepted Answer

A)  $1.75 
B)  $0.57 
C)  $25.00 
D)  $0.07 
A)  $1.75 
B)  $0.57 
C)  $25.00 
D)  $0.07

Question 3

Valuing assets at their fair value rather than at their cost is inconsistent with the

Accepted Answer

A)  economic entity assumption. 
B)  historical cost principle. 
C)  periodicity assumption. 
D)  full disclosure principle. 
A)  economic entity assumption. 
B)  historical cost principle. 
C)  periodicity assumption. 
D)  full disclosure principle.

Question 4

To be faithfully representative, accounting information should predict future events, confirm prior expectations, and be reported on a timely basis.

Accepted Answer

A) True 
 B)False

Question 5

Most companies use a(n) _________ rather than a retained earnings statement.

Accepted Answer

A)  balance sheet 
B)  income statement 
C)  statement of cash flows 
D)  statement of stockholders' equity 
A)  balance sheet 
B)  income statement 
C)  statement of cash flows 
D)  statement of stockholders' equity

Question 6

Cost constraint weighs the cost that companies incur to provide a type of information against its benefit to financial statement users.

Accepted Answer

A) True 
 B)False

Question 7

Bathlinks Corporation has a debt to assets ratio of 73%. This tells the user of Bathlinks's financial statements that

Accepted Answer

A)  Bathlinks is getting a 27% return on its assets. 
B)  there is a risk that Bathlinks cannot pay its debts as they come due. 
C)  73% of the assets are financed by the stockholders. 
D)  based on this measure, the user should not invest in Bathlinks. 
A)  Bathlinks is getting a 27% return on its assets. 
B)  there is a risk that Bathlinks cannot pay its debts as they come due. 
C)  73% of the assets are financed by the stockholders. 
D)  based on this measure, the user should not invest in Bathlinks.

Question 8

Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment.

Accepted Answer

A)  $270,000 
B)  $250,000 
C)  $180,000 
D)  $210,000 
A)  $270,000 
B)  $250,000 
C)  $180,000 
D)  $210,000

Question 9

Relevance and faithful representation are the fundamental qualities of useful information.
(a) Briefly define each term.
(b) Why are these characteristics important to users of financial statements?

Accepted Answer

(a) Relevance is the quality of informat

Question 10

In order for accounting information to be relevant, it must

Accepted Answer

A)  have very little cost. 
B)  help predict future events or confirm prior expectations. 
C)  not be reported to the public. 
D)  be used by a lot of different firms. 
A)  have very little cost. 
B)  help predict future events or confirm prior expectations. 
C)  not be reported to the public. 
D)  be used by a lot of different firms.

Question 11

Using the following balance sheet and income statement data, what is the total amount of working capital?   Average common shares outstanding was 10,000.

Accepted Answer

A)  $ 4,000 
B)  $16,000 
C)  $ 5,000 
D)  $ 8,000 
A)  $ 4,000 
B)  $16,000 
C)  $ 5,000 
D)  $ 8,000

Question 12

Use the following data to calculate the current ratio.

Accepted Answer

A)  2.34 : 1 
B)  2.80 : 1 
C)  3.31 : 1 
D)  1.26 : 1 
A)  2.34 : 1 
B)  2.80 : 1 
C)  3.31 : 1 
D)  1.26 : 1

Question 13

The operating cycle of a company is the average time that is required to go from cash to

Accepted Answer

A)  sales in producing revenues. 
B)  cash in producing revenues. 
C)  inventory in producing revenues. 
D)  accounts receivable in producing revenues. 
A)  sales in producing revenues. 
B)  cash in producing revenues. 
C)  inventory in producing revenues. 
D)  accounts receivable in producing revenues.

Question 14

Relevance and cost are two constraints in accounting.

Accepted Answer

A) True 
 B)False

Question 15

Using the following balance sheet and income statement data, what is the current ratio?   Average common shares outstanding was 10,000.

Accepted Answer

A)  2.0 : 1 
B)  2.6 : 1 
C)  0.5 : 1 
D)  2.9 : 1 
A)  2.0 : 1 
B)  2.6 : 1 
C)  0.5 : 1 
D)  2.9 : 1

Question 16

The following information is available from the annual reports of Marin Company and Nance Company.   Instructions
(a) For each company, compute the following ratios:
1. Current ratio
2. Debt to assets ratio
3. Earnings per share
(b) Based on your calculations, discuss the relative liquidity, solvency, and profitability of the two companies.

Accepted Answer

@#IMG-DLM& (b) Based on the current ratio, Nance i

Question 17

Net cash provided by operating activities takes into account that a company must invest in capital expenditures just to maintain its current level of operations.

Accepted Answer

A) True 
 B)False

Question 18

Use the following data to calculate the current ratio.

Accepted Answer

A)  2.13 : 1 
B)  1.44 : 1 
C)  2.86 : 1 
D)  2.50 : 1 
A)  2.13 : 1 
B)  1.44 : 1 
C)  2.86 : 1 
D)  2.50 : 1

Question 19

Use the following data to determine the total dollar amount of assets to be classified as investments.

Accepted Answer

A)  $0 
B)  $160,000 
C)  $90,000 
D)  $140,000 
A)  $0 
B)  $160,000 
C)  $90,000 
D)  $140,000

Question 20

The following data are taken from the financial statements of Edington Company. The data are in alphabetical order.   Instructions
Compute the following:
(a) Current ratio. (c) Earnings per share.
(b) Working capital. (d) Debt to assets ratio.

Accepted Answer

(a) Current ratio = Current assets ÷ Cur

Trademarks would appear in which balance sheet section?

For 2014 Kuhlman Corporation reported net income of $28,000; net sales $400,000; and average share outstanding 16,000. There were no preferred dividends. What was the 2014 earnings per share?

Valuing assets at their fair value rather than at their cost is inconsistent with the

To be faithfully representative, accounting information should predict future events, confirm prior expectations, and be reported on a timely basis.

Most companies use a(n) _________ rather than a retained earnings statement.

Cost constraint weighs the cost that companies incur to provide a type of information against its benefit to financial statement users.

Bathlinks Corporation has a debt to assets ratio of 73%. This tells the user of Bathlinks's financial statements that

Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment.

Relevance and faithful representation are the fundamental qualities of useful information. (a) Briefly define each term. (b) Why are these characteristics important to users of financial statements?

In order for accounting information to be relevant, it must

Using the following balance sheet and income statement data, what is the total amount of working capital? Average common shares outstanding was 10,000.

Use the following data to calculate the current ratio.

The operating cycle of a company is the average time that is required to go from cash to

Relevance and cost are two constraints in accounting.

Using the following balance sheet and income statement data, what is the current ratio? Average common shares outstanding was 10,000.

Net cash provided by operating activities takes into account that a company must invest in capital expenditures just to maintain its current level of operations.

Use the following data to calculate the current ratio.

Use the following data to determine the total dollar amount of assets to be classified as investments.

The following data are taken from the financial statements of Edington Company. The data are in alphabetical order. Instructions Compute the following: (a) Current ratio. (c) Earnings per share. (b) Working capital. (d) Debt to assets ratio.

Introduction to Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Time Value of Money

Filters

Exam 2: A Further Look at Financial Statements

Trademarks would appear in which balance sheet section?

For 2014 Kuhlman Corporation reported net income of $28,000; net sales $400,000; and average share outstanding 16,000. There were no preferred dividends. What was the 2014 earnings per share?

Valuing assets at their fair value rather than at their cost is inconsistent with the

To be faithfully representative, accounting information should predict future events, confirm prior expectations, and be reported on a timely basis.

Most companies use a(n) _________ rather than a retained earnings statement.

Cost constraint weighs the cost that companies incur to provide a type of information against its benefit to financial statement users.

Bathlinks Corporation has a debt to assets ratio of 73%. This tells the user of Bathlinks's financial statements that

Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment.

Relevance and faithful representation are the fundamental qualities of useful information. (a) Briefly define each term. (b) Why are these characteristics important to users of financial statements?

In order for accounting information to be relevant, it must

Using the following balance sheet and income statement data, what is the total amount of working capital? Average common shares outstanding was 10,000.

Use the following data to calculate the current ratio.

The operating cycle of a company is the average time that is required to go from cash to

Relevance and cost are two constraints in accounting.

Using the following balance sheet and income statement data, what is the current ratio? Average common shares outstanding was 10,000.

Net cash provided by operating activities takes into account that a company must invest in capital expenditures just to maintain its current level of operations.

Use the following data to calculate the current ratio.

Use the following data to determine the total dollar amount of assets to be classified as investments.

The following data are taken from the financial statements of Edington Company. The data are in alphabetical order. Instructions Compute the following: (a) Current ratio. (c) Earnings per share. (b) Working capital. (d) Debt to assets ratio.

Introduction to Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Time Value of Money

Filters